Gambling in the BVI is illegal. Part 2

Many Internet businessmen are looking for the right jurisdiction to incorporate and run online gambling business. The British Virgin Islands would not be a right jurisdiction for establishing offshore gambling business like online lotteries, casinos, etc. In Caribbean region, it would be better to look at Costa Rica or, maybe, turn round the Globe and look at the Channel Islands.

There are many questions that one should answer before setting up a complete online gambling site or casino. Most of these questions are related to an existent spot on the map even if gambling occurs through the Internet. They are about incorporation country, country issuing the gambling license, place(s) where servers are actually held, Bank account(s), Merchant account(s), etc.

Of course, a British Virgin Islands business company can be wisely used in online gambling business structure. There are a lot of BVI companies more or less directly related to online casinos as well as brick and mortar casinos all over the world. However, if we are speaking about gambling things, the British Virgin Islands wouldn’t be the first word to come in mind. More important thing to memorize is the following: if you have arrived in the British Virgin Islands, do remember that gambling is illegal there.

Gambling in the BVI is illegal. Part 1

The Commissioner of Police, Mr. Frazer informed those who might be unaware of this that gambling and selling and purchasing of lottery tickets is an offence in the British Virgin Islands.

Frazer admits that gambling and selling of lottery tickets is often taken as a norm in the BVI, and therefore he advised on this matter to warn people committing this offence, however, if persons continue the practice, they will inevitably be arrested. So, this was to inform the public on the laws that exist.

Section 301 of the Criminal Code states the following:

- Any person who knowingly permits, or is concerned in, the use of any building or place for the purpose of gambling, betting or the holding of a lottery or sweepstake, commits an offence and is liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding one thousand dollars, or both.

- Police may be authorized by day or night to enter such house or place (suspected of committing the offence of gambling) and to search the same and any persons found therein, and to seize all instruments and appliances of gambling, betting, or required for the holding of a lottery or sweepstake, and all money, securities for money and other articles reasonably supposed to have been used or intended to be used for any such purpose.

Canadian request reverted to the next WTO meeting

The Caribbean-Canada Trade Agreement or Caribbean Initiative known as CARIBCAN is a Canadian government program that was established by the Parliament of Canada in 1986 to promote trade and investment and provide industrial cooperation through the duty-free goods from the countries of the Commonwealth-Caribbean to the Canadian market.

It aims at enhancing the Commonwealth Caribbean’s existing trade and export earnings, improving the trade and economic development prospects of the region, promoting new investment opportunities as well as encouraging enhanced economic integration and cooperation within the region.

As far as Caribbean Initiative expires at the end of the year, Canada intends to extend it.
At a recent meeting of the Council for Trade in Goods of World Trade Organization (WTO), Canada requested a 5-year extension of the waiver for its CARIBCAN. This program enables Canada to grant duty-free treatment to imports from the British Virgin Islands, Bermuda, Bahamas, Anguilla, Antigua and Barbuda, Barbados, Belize, the Cayman Islands, Dominica, Grenada, Jamaica, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Trinidad and Tobago, Guyana, Montserrat and the Turks and Caicos Islands.

The Council for Trade in Goods of WTO is going to revert to Canadian request at its next meeting.

Both Canada and the BVI and other countries wait for the extension of the agreement as far as it enables the countries improve and develop their economies.

Australia is pursuing tax evaders again

Australian authorities continue their fight against tax evaders. The new results of this fighting have just been published. It is worth mentioning that most often Australian Tax Office faces the necessity to fight against using credit cards issued by offshore banks that help to deliver the earned money to Australia where it gets spent.

Currently, the Australian Tax Office is suspicious of approximately 3600 offshore credit card holders after having examined 110 000 transactions. Reviewing transactions from another
1800 cardholders is referred by the global taskforce. 24 "non-compliant" cases have already been completed, and 4 million USD raised.

Bank account and cards are generally opened in different offshore banks of the world, but one Australian citizen who was interrogated had been using a card issued by a British Virgin Islands bank, and he drew authorities' attention by spending 14 000 USD in 28 days. This man was saying that the card had been given to him be by his British employer to cover "incidental expenses".

Frankly speaking, this amount is nothing when compared to one New Zealander who was prepared to spend 20 millions from his offshore bank account by means of no-name card and has never lodged an Australian tax return.

Many people consider Australia to be a paradise to live and retire, but they should not forget about paying taxes. On March 1, 2006 we discussed tax information exchange between the BVI and Australia that makes Australian pursuing tax evaders easier as the Caribbean countries is among Australia's most favorite tax havens.

Also, the Australian Tax Office is monitoring local promoters of schemes that in order to shift income offshore use fake business transactions.

AfriOre Reports Financial Results

A British Virgin Islands-based company specializing in the acquiring resource properties and exploration and development of platinum and gold projects in Africa received bullish estimates for its Akanani Platinum Project discussed in the blog on June 13, 2006.

A BVI-based AfriOre Limited (AFO.TO) reported a loss of of 1 002 131 USD for the 3-month period that ended on May 31, 2006. To compare, it reported a loss of 355 025 USD for the 3-month period that ended on May 31, 2005.

The loss for the 3-month period can be explained by an increase in exploration expenditure and the foreign exchange losses that occurred because of the weakening of the South African Rand during the above-mentioned period. However, the increase in expenditure at Akanani brought positive results from the intensive exploration program on the Akanani Platinum Project.

Consolidated Interim Financial Statements for the 3-month periods and Management’s Discussion and Analysis have been filed on SEDAR.

CIC Energy Corp. Financial Loss

A BVI-based CIC Energy Corp. reported a loss of 1 677 658 USD for the 6-month period that ended on May 31, 2006.

The loss for the 6-month period can be explained by non-capitalized exploration expenditures, administration costs, costs related to the consolidation of Coal Investment Corp. and Ophir Ventures Inc. in March 2006, and listing the common shares of CIC on the TSX.

Consolidated Interim Financial Statements for the 3 and 6-month periods and Management’s Discussion and Analysis have been filed on SEDAR and can be found at http://www.sedar.com/search/search_form_pc_en.htm

CIC is a British Virgin Islands corporation governed by the laws of the BVI. It was established to engage in the exploration, development and operation of greenfield coal property in the Mmamabula Coalfields in Southern Africa.

Crills Joining Walkers

The blog BVI offshore law practitioner Stephen Pollard joined Walkers informed that Stephen Pollard joined Walkers' London office to work on the funds and corporate issues of the British Virgin Islands and the Cayman Islands.

Now, Crills Advocates - a Jersey-based company providing institutional offshore and domestic legal services joins this global offshore law firm to provide offshore legal services in Jersey and offer Jersey legal and administrative services in jurisdictions all over the world including the British Virgin Islands, Dubai, London and Hong Kong. Crills Advocates will now work under the Walkers name.


Walkers' expansion into Jersey is essential as Jersey is a key jurisdiction for numerous structured finance products and investment funds.

The company is recognized as "Offshore Law Firm of the Year" by The Lawyer. The Lawyer awarded the company as "Offshore Law Firm of the Year" because Walkers is successful in the offshore market, has offices in the Cayman Islands, the British Virgin Islands, London, Dubai, Hong Kong, and is influential there. The joined efforts of two companies will provide new opportunities for companies' customers. The combination of Walkers’ established global client base and Crills’ expertise will let Walkers offer legal and administration services to support investment strategies of customers in the BVI, Cayman and Jersey.

Walkers' work in the British Virgin Islands and the Cayman Islands is extremely successful, but extending company presence in other regions is also very important for customers.

RSM (British Virgin Islands) Limited establishment

As RSM Cayman Islands are expanding its Corporate Advisory Services practice to the BVI, the new company, RSM (British Virgin Islands) Limited, has been established.

A partner of RSM Cayman Islands, Christopher Stride will lead RSM (British Virgin Islands) Limited. He was the one to establish RSM Cayman Islands in 2002 and will be the one to continue to take part in the Cayman Islands practice. Recently, Christopher Stride has been approved by local regulators as an Insolvency Practitioner in the British Virgin Islands.

In August of 2004, the Insolvency Act 2003 was enacted by the British Virgin Islands to deal with insolvent companies and to supervise insolvency practitioners. As a result, in last 3 years, many quite big law and accounting companies were registered in the BVI. Many corporate vehicles were set up in the BVI, so, the BVI jurisdiction became favourable for expanding the services offered in the Cayman Islands. The company's growth reflects the need for qualified and independent practitioners in the insolvency and forensic accounting sphere.

A team of professionals to work in the BVI and to use complementary resources from Cayman Islands office in order to support our clients has already been selected.

China Security & Surveillance Technology Inc. gets $12.9 Million Private Placement

China Security & Surveillance Technology Inc. is a British Virgin Islands corporation that deals with the surveillance industry in China, specializes in homeland security products and surveillance systems and has branch offices in 20 cities throughout China.

Last week, China Security & Surveillance Technology Inc. announced its entering into a Securities Purchase Agreement with institutional investors for the private placement of 2,275,794 units (each unit includes one share of company's common stock and a warrant to purchase one-fifth of one share of company's common stock) with accredited institutional investors. The units are sold under the Securities Purchase Agreement for $4.50 per unit.

Net proceeds to the BVI-based China Security & Surveillance Technology Inc. from the sale of all of the units was going to be $10,241,093. But then, China Security & Surveillance Technology Inc. accepted additional $1.8 million subscription raising more than $12 million. The BVI company expects to close the transaction by the end of this week.

BVI - 50 years ago

July 1 was a big event for the British Virgin Islands as July 1 is its 50th anniversary date - on July 1, 1956 the Virgin Islands officially became an autonomous Territory.

So, back in 1956 it was decided that the BVI be established as an autonomous Territory – as a result, the BVI of today is a separate political entity with its strong and rapidly developing economy.

The BVI is still going along the road of self-government and economic development and therefore it is vitally important for it to be aware of its history. Not only the history of the first islanders is important for the BVI, but the history of its last 50 years is essential as well.

The celebration of the BVI 50th anniversary organized by the government of the British Virgin Islands as well as the Ministry and Department of Education and Culture was open to the public as an opportunity for the Islanders to affirm their identity and feel a sense of national pride for themselves and their Territory. The ceremony began with Governor David Pearey and Chief Minister Dr Orlando Smith inspecting the guards. The public was entertained by several musical groups, including the BVI High School Jazz Band.

After its establishment as a separate entity in 1956, the group of islands did not join the 1958-1962 West Indies Federation of British Virgin Islands in order to preserve its economic ties with the US Virgin Islands. In the 1950's and 60's, Laurence Rockefeller made application to the BVI government to build a resort at Little Dix Bay on Virgin Gorda which was opened in 1964. This was the 1st vacation resort established in the British Virgin Islands. In 1967, a new constitution was adopted and a ministerial system of government has been headed by a Chief Minister until now and is still under British control.

In the beginning of the 1980's an offshore financial services sector began to develop. During the 1980-1991, the population of the BVI almost doubled because expanding economic activity attracted many people from neighbouring countries and the Caribbean region. The economic development led to radical demographic and social change in the BVI.

Nowadays, the BVI is a growing tourist centre attarcting many tourists from all over the world. Besides tourism, the BVI continues to have a very low unemployment, a well-developing economy and political and social stability.

Fidelity Overseas Group

Fidelity Overseas group is in offshore business for more than 10 years. There are 2 other Fidelity Overseas group companies licensed to provide offshore company formation and management services. One is located in Gibraltar, another in the Seychelles.

Fidelity Corporate Services Gibraltar is the oldest company in the group. It is licensed by the Gibraltar Financial Services Commission to provide offshore company formation and management services. It includes provision of the registered address, agent and resident secretary, provision of company management and administration services for Gibraltar non-resident companies.

Fidelity Corporate Services Seychelles is licensed by the Seychelles International Business Authority (SIBA) as an International Corporate Service Provider with license number 004. Seychelles International Business Company or IBC is the basic offshore product in the Seychelles. It is quite similar to British Virgin Islands IBC with several differences (for example, bearer share regime is more democratic, much like BVI IBC Act before 2004). Another product - Special License companies (CSL) introduced by Seychelles Companies (Special Licenses) Act 2003 starts to gain quite substantial popularity due to it’s low tax nature (different from zero-tax for Seychelles IBC or British Virgin Islands BC) which allows to utilize them in business transactions with counterparts located in high-tax countries with serious fiscal countermeasures against the traditional zero-tax companies.

Fidelity Corporate Service BVI is the newest corporate services provider in the group adding BVI offshore services and BVI business companies to the list and making group a serious choice for people looking for global solutions in conjunction with local expertise.

New BVI offshore company incorporation firm

A new offshore incorporation firm - Fidelity Corporate Services has started to provide the offshore services in the BVI. It is licensed under the BVI Banks and Trust Companies Act 1990 as trust company and has paid up capital of USD 250,000. Fidelity is authorized to provide offshore company formation and management services and namely:

• registered agent services;
• registered address;
• directorship and company management services;
• shareholder’s services (reasonable alternative to bearer shares in the BVI);
• secretarial services;
• custody of documents;
• corporate searches and filings;
• drafting of corporate documentation;
• mail forwarding and virtual office;
• bank account introductions and management etc.

Registered office of the new BVI offshore service provider like of other BVI registered agents is located on Tortola Island and particularly at DiCastro Building at Drakes Highway, Floor 4.

It is pleasant to see that the new BVI offshore company formation firm provides very competitive and quite detailed fee schedule without hiding substantial fees. Many offshore service providers try to play with customers by indicating low registration fee (like government fee USD 350 plus some extra USD 200) and then customer should find all applicable fees themselves (registered agent and address, Apostille legalization, delivery and so on) – this is like putting together the Lego for the first time. Fidelity provides professional straight-forward approach with detailed BVI offshore services fee schedule as well as package price for typical BVI business company where the most popular features required for offshore bank account opening are included.

More detailed information on Fidelity Corporate Services BVI you can find on their newly opened website http://www.offshorebvi.com.

BVI-based Wonder Auto Limited goes public with 12 Million USD private financing

On June 23, 2006, MGCC Investment Strategies, Inc. announced the closing of a share exchange transaction with the stockholders of Wonder Auto Limited, a British Virgin Islands corporation.

Just before the consummation of the share exchange transaction, a private placement of capital stock of Wonder Auto was closed and it received $12 million in gross offering proceeds. One of the stockholders of Wonder Auto sold shares of company's common stock that resulted in gross proceeds of $8 million.

A BVI company Wonder Auto – a leading manufacturer of automotive electrical parts – is located in China. The company curently employs more than 290 people. Its products are manufactured in Jinzhou City factory. This China located BVI company produces broad product lines of alternators and starters and sells them through both vehicle OEMs and distributors, and its customers include such autoindustry giants as Beijing Hyundai Motor Company, Dongfeng Yueda Kia Motors Co., Ltd and Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co. Ltd. In 2005, consolidated net sales of Wonder Auto were about $48.1 million and consolidated net income was about $6.4 million. The BVI company expects to get gross revenues of about $66.0 million in fiscal 2006 and $92.5 million in fiscal 2007.

After the share exchange transaction, Wonder Auto's stockholders were issued 8,627,858 shares (which is about 88% of MGCC's outstanding common stock) in exchange for their shares of the BVI company.